Seth Godin is a thinker, entrepreneur, and author. He created the concept of "permission marketing", where marketers obtain permission before advancing to the next step in the purchasing process. Permission marketing is the opposite of its evil twin...interruption marketing. Those of us in the financial services community all know what "interruption marketing" is.
In 1998, Godin sold his company, Yoyodyne, to Yahoo for $30 million. Since then, he has authored 11 books. His blog, Seth's Blog, is ranked by AdAge Power as the #1 marketing blog out of 976 ranked.
With Seth's bona fides out of the way, let's point to a recent post of his, entitled, "Embracing Lifetime Value". In this post, he says..."Few businesses understand (really understand) just how much a customer is worth. Add to this the additional profit you get from a delighted customer spreading the word...it can easily double or triple the lifetime value."
Point well taken. Applying this observation to the world of financial advisors, how much is a client worth? For example, let's consider a a client who has placed $1 million with their advisor. Let's also assume that the annual fees on this account are 1%, and the lifetime of the account is 10 years. (Maybe 10 years is a bit long for a time frame, but not unreasonable to assume for a good client who you like.) In this scenario, the lifetime value of this client relationship would be $100,000...right? (Of course, to be exactly precise with this scenario we would need to calculate a net present value of $100,000 as discounted by inflation...but that's too much for any of us in a pre-tryptophan kinda mood!)
What would you be willing to invest to keep a $100,000 client absolutely delighted? In other words, is your present Client Service Model matrix sufficient to satisfy your best clients, or are you falling short? Also...what would be willing to invest to find one, two, or three more $100,000 clients? Does your 2010 marketing budget reflect this?
All good questions, and food for thought on this Thanksgiving holiday.
All the best to you!